As San Francisco supervisors weigh dueling business tax overhauls, several business groups are rallying around a less-costly plan backed by the mayor and Supervisor David Chiu.

“We strongly believe that the measure proposed by Mayor (Ed) Lee and Board President David Chiu is the appropriate starting point for the legislative discussion and debate” this month, reads a letter sent to supervisors whose signatories include the San Francisco Chamber of Commerce, Golden Gate Restaurant Association and Small Business Network.

The Lee-Chiu proposal calls for a gross receipts tax to replace the city’s payroll tax. It would raise approximately $410 million, the same amount generated by the current payroll tax.

The city now charges a flat 1.5 percent on a company’s total employee payroll that exceeds $250,000. Businesses have criticized the payroll tax for years, objections that have became even more pointed as companies struggled to shake off the job-killing effects of the Great Recession.

Businesses said that the Lee-Chiu proposal still needs some tweaking, particularly for the various tax rates that would be charged. But they prefer it to the competing business tax overhaul authored by Supervisor John Avalos.

“The intention of the letter is to make clear we are with the mayor and want to come up with a gross receipts and business tax ordinance that everyone can sign onto in July,” said Jim Lazarus, the head of public policy for the San Francisco Chamber of Commerce.

The Avalos measure — which also would scrap the payroll tax in favor of gross receipts — would bring in about $450 million, a $40 million increase that Avalos said is needed to pay for city services.

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